Moving to Spain For A Year Tax and Medical Care Questions

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27 Jan 2015 3:59 PM by ggray9154 Star rating. 2 posts Send private message

Spanish Taxes

My wife and I are US Citizens we are moving to Spain for a year to see how we will like living there. We spent a month in Spain 3 years ago and enjoyed the Costa Del Sol. I am 74 and my wife is 73 years old and Iwe are both retired.  I have a retirement pension from the US Civil Service and we both have Social Security Benefits. We will be using our Non Lucrative Visas to make the move. I planning on a long term lease for our stay in Spain once we settle on the community where we will be living. I have done some research and have some questions related to the tax issues related to our stay and possible retirement there in Spain. We presently live in Texas so we don't pay state taxes presently. We are planning on leaving the US on Feb 24th for Spain.

Here are my questions:

  1. How long after we establish our residency in Spain will we be subject to income tax in Spain?

  2. I have am aware of the dual taxation treaty between the US and Spain how will that impact us?

  3. Will my Civil Service retirement pension be taxed in Spain?

  4. How are Social Security Benefits taxed in Spain?

Would greatly appreciate any information related to my questions.

 

 

 

Medical Questions

 

I have Government Employees Health Assurance (GEHA) medical insurance from my civil Service retirement that is secondary to our Medicare parts A and B coverage. When we are in Spain I know we will not have have our US medicare coverage and GEHA will become our primary Insurance. We think we would like to apply for the Spanish health care system if we decide to stay in Spain

 

We have a couple of questions:

  1. How long does the process take for US Expats?

  2. How well does it work in comparison to US Medicare, any first had experience from US Expats?


This message was last edited by ggray9154 on 27/01/2015.



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28 Jan 2015 6:24 PM by Roberto Star rating in Torremolinos. 4551 posts Send private message

Roberto´s avatar

I think the vast majority of members on this forum are British or other EU nationals, so unfortunately you are unlikely to get any helpful responses because nobody here is familiar with the situation for US citizens. I suggest you start by looking here: http://madrid.usembassy.gov/fbu.html, or maybe try to find a forum populated by your Countrymen with direct experience of living in Spain. 

Good luck!



_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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29 Jan 2015 8:38 AM by nigel188 Star rating in Estepona. 655 posts Send private message

I have found two other  websites which might help you on this matter.

 

http://www.spainexpat.com/spain/information/taxes_for_expatriates_in_spain/

 

http://www.expatexchange.com/article/4276/Obamacare-911-What-US-Expats-Need-to-Know-About-Coverage--US-Taxes-Abroad

 

Good Luck with your move to Spain.

 

 

 


This message was last edited by nigel188 on 29/01/2015.

_______________________

Nigel




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30 Jan 2015 12:53 PM by mariadecastro Star rating in Algeciras (Cadiz). 9419 posts Send private message

mariadecastro´s avatar

Here are my questions:

1.    How long after we establish our residency in Spain will we be subject to income tax in Spain?

http://www.eyeonspain.com/blogs/costaluz/3579/legal-tip-278-tax-residency-in-spain.aspx

 

2.    I have am aware of the dual taxation treaty between the US and Spain how will that impact us?

http://www.irs.gov/pub/irs-trty/spain.pdf

 

3.    Will my Civil Service retirement pension be taxed in Spain?

http://www.irs.gov/pub/irs-trty/spain.pdf ( art 20)

 

4.    How are Social Security Benefits taxed in Spain?

    http://www.irs.gov/pub/irs-trty/spain.pdf ( art 20)

 

 

Would greatly appreciate any information related to my questions.

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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31 Jan 2015 12:49 AM by ggray9154 Star rating. 2 posts Send private message

Thanks to all who responded to my questions sofar.





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31 Jan 2015 1:13 PM by gerryinalbany Star rating in Albany , New York, U.... 30 posts Send private message

gerryinalbany´s avatar

Hi- I wish you luck with your move, I have researched this subject myself being a "Yank"  and what I do know is  that there is a tax treaty with the US but according to my Spanish lawyer the tax office in Orihuela is not very versed on it. We will be moving in July of this year so this is something I've  had numerous discussions with Aietor (our lawyer) ,According to the tax treaty  you are responsible to pay (income) tax to the US as your pensions IRA or 401K originates there, www.irs.gov/pub/irs-trty/spain.pdf  .and you do not have to pay the Spanish income tax unless you have Spanish  income

But as I  alluded too earlier this is a murky area , there are no tax offices at either the Embassy in Madrid or the Consulate in Barcelona the closet American tax office is in Paris so it is not much help(I contacted them , they just refered me to the IRS website)

My best advise is to read the tax treaty where it refers to Soc Security/Pensions ,find a good Spanish lawyer make sure he is aware of the tax treaty  ,from what  Aietor has told me I will still have to file a US and a Spainish tax return ,but I should have no Spanish income tax liability and I would imagine unless you have Spanish income you will be in a similar situation.

It sounds like a huge hassle, but isnt that true of the IRS all the time?

You only have to pay Spanish income tax if you become a tax resident- that means that you have recieved your "residencia" and can live in country for more than 6 months. You have to have a full years paid health insurance before you can recieve this, you can apply for the NHS after you have been there a year I believe in your age group its about 200 euros a month per person I believe private  insureance is less  - I suggest you contact the Spanish consulate closest to where you live in the states as there are several requirements, being non EU  we have our own hoops we must jump through,proof of income, police and FBI clearance ,we needed a signoff from the Spanish Military as the Orihuela costa falls under Franco era military designation not sure of the Costa del Sol

 

I just reread your post - how long does it take? uh -good question as I believe you have 90 days to get everything accomplished and dealing with the Spanish goverment things take time , when we bought our apartment we had to do almost the identical paperwork to buy as we are preparing now for our residencia

All the best and much happiness to you in your life in Spain  -Gerry

 

 

 


This message was last edited by gerryinalbany on 31/01/2015.


This message was last edited by gerryinalbany on 31/01/2015.


This message was last edited by gerryinalbany on 31/01/2015.



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31 Jan 2015 2:28 PM by gerryinalbany Star rating in Albany , New York, U.... 30 posts Send private message

gerryinalbany´s avatar

 

 

Hello this what my attorney sent me

"But also one of the conditions to get the residence is to have a private health insurance, for at least the first year. 
And the fees to pay to have the medical card, public one, aftre one year is: if you are under 65 years old will be 60 €uros per month and if you are more than 65 years old, the fees are 157 €uros per month ( expensive to have the public health card, so maybe a private health insurance is cheaper per month)."
 
So I was mistaken when I said 200 a month
 
This is what the Spanish consulate sent me:

NON-LUCRATIVE RESIDENCE VISA

 

This visa allows you to reside in Spain without engaging in any type of lucrative activities. The process may take between 2 to 4 months from the day all documents are presented.

Once your visa is authorized, we will contact you immediately by email or mail, and you (and all your family members applying for a visa) will have to come in person to this Consulate General within a month with your passport and an itinerary of flight to Spain to obtain the visa.

For information about acquiring the Apostille of the Hague Convention in the US, please visit: http://travel.state.gov/law/judicial/judicial_2545.html

 

 

The consular administration has full authority to evaluate, and request more documents than those submitted by the applicant. The latter is hereby informed that submitting the aforementioned documents does NOT guarantee automatic issuance of the visa. The documents accepted to process the visa will not be returned.

ORIGINAL of each of the following items must be presented

 

1. National visa application form: The application forms must be signed and filled out in print.

 

2. Original Passport: Valid passport for a minimum of 1 year, with at least one blank page to affix the visa.

 

3. Two passport size photos: (White Background, 2x2in) One per application form.

 

4. Document explaining why you are requesting this visa, the purpose, the place and length of your stay in Spain and any other reasons you need to explain, plus certified translation into Spanish. Wiht an adress in Spain.

 

5. Proof of enough periodic income (investments, annuities, sabbaticals and any other source of income) to live in Spain without working.. All documentation must be certified translated into Spanish.

 

6. Police Criminal Record. It cannot be older than 3 months from the application date plus certified translation into Spanish. The certificate must be either:

a) Department of State clearance original letter form (from the States where you have lived during the past 5 years). It must be legalized with the Apostille of the Hague Convention from the corresponding Secretary of the State.

b) FBI Records for international purposes, issued by the US Department of Justice – Federal Bureau of Investigation. They must be legalized with the Apostille of the Hague Convention from the US Department of State in Washington DC.

You must get a police record from the countries where you have lived during the past 5 years.

 

7. Medical Certificate plus certified translation into Spanish: Doctor’s recent statement (not older than 3 months) in doctor’s or medical center’s letterhead, indicating that ‘the patient has been examined and found free of any contagious diseases according to the International Health Regulation 2005’. Must be signed by a M.D.

 

8. Proof of international medical insurance while in Spain, plus certified translation into Spanish.

 

9. Non-US Citizens will have to provide evidence of their legal residence in the United States

 

I guess this muddies the waters a bit!- this is typical being NonEU of the type of steps you need to take , alot more complex than  you would think

 

This doesnt mention the Military clrearance as that is something the  the region may require as in our case in Orihuela

Please feel free to contact me privately if you have any questions or I can be of service-Gerry





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